International Journal of Sales & Marketing

Management Research and Development (IJSMMRD)

ISSN(P): 2249-6939; ISSN(E): 2249-8044
Vol. 4, Issue 6, Dec 2014, 1-10
TJPRC Pvt. Ltd.

STRUCTURE AND PERFORMANCE OF GOAT MARKET IN OYO STATE, NIGERIA

OLADEJO JOANA ADEFEMI
Department of Agricultural Economics, Ladoke Akintola University of Technology,
Ogbomosho, Oyo, Nigeria

ABSTRACT
This study was conducted to analyze the marketing system of goat in Oyo State, Nigeria. Multistage sampling
technique was employed to select 125 goat traders and a well structured interview schedule was employed to obtain
necessary data based on the specific objectives of the study. Descriptive statistics such as table, frequency distribution,
percentage, mean and standard deviation were used to analyze the socio-economic characteristics of goat traders, goat
trading practices and experiences as well as the challenges to goat trading activities in the study area. Budgetary analysis
was carried out to investigate profitability of the enterprise. Traders concentration ratio was computed to examine the
structure of goat market in the study area. Regression analysis was employed to identify variables influencing revenue
generated by respondents. Data analysis revealed that mean age of the respondents was 42.9 years, 80.8% were married
and on the average, the respondents had 18.31 years of goat trading experience. Goat market was found to be perfectly
competitive in structure. Gross margin of 4,264.88 per goat sold and benefit cost ratio of 1.17 revealed that goat trading
enterprise is profitable in the study area. Result of regression analysis showed that three of the estimated variables
(purchase cost, feeding cost and respondents years of experience) have significant effects on revenue generated by
respondents in the study area. Challenges faced by the goat traders are in order of finance, fluctuation in price, seasonality
of market, mortality, thief or pilfering, expensive veterinary service and drugs. This study recommends that the traders
should form a registered trade association through which a solution could be sought to the challenge of unstable market
prices in the study area.

KEYWORDS: Structure, Concentration Ratio, Budgetary Analysis, Goat, Market

INTRODUCTION
Goats belong to the group of animals known as capra. They are ruminant animals like cattle and sheep;
are commonly found in towns and villages all over West Africa. Goats are more evenly distributed in West Africa than
other ruminant animals (Komolafe et al, 2007). There are over three hundred distinct breeds of goat. The goat is closely
related to sheep as both are in the goat-antelope sub-family caprinae. Goats are one of the oldest domesticated species.
Goats have been used for their milk, meat, hair and skin over much of the world. In the twentieth century they also gained
in popularity as pets. Domestication of goats has been recognized archeologically by the presence and abundance of the
animal into regions that were well beyond their normal habitats, by perceived changes in their body size and shape
(called morphology), by differences in demographic profiles in wild and domestic groups, and by stable isotope
recognition of their dependence on year-round fodder (Alizadeh, 2003). Goats are kept traditionally by a large part of the
population in the rural areas. These goats fulfill important roles within the households of subsistence farming system in
these rural areas. They are used to maintain social bonds with the commodity (dowry), they are also used for ceremonial
(Dombo et al, 2000) or religious purposes (Casey and Meyer, 2001), and they provide an income as well as meat and milk
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Oladejo Joana Adefemi

for the household. At present, the improvement of goat production receives attention from the National Department of
Agriculture, provincial department of agriculture, universities and non-Governmental Organizations (NGOs).
Goat keeping is regarded as a feasible means to improve the income and nutrition of rural communities and to incorporate
these communities into commercial market (Tesfaye, 2009).
It has been reflected time and again that livestock in Nigeria is an important and integral component of
agriculture, which is the backbone of the economy. Not only does the sub-sector provide the much needed animal protein
for the ever-growing human population, but it also offers employment opportunities for millions of rural and urban
dwellers involved in some form of livestock production and marketing (Asnakew, 2005). Considering goat critically, they
have a great role in the economy of farming community of Nigeria. Goats represent a more liquid form of capital than
cattle and are readily tradable (Sendros, 2003). Despite the large size of the countrys goat enterprise, the productivity per
unit of animal and the contribution of this sector to the national economy is relatively low (Devandra, 2007). This may be
due to different factors such as poor nutrition, prevalence of diseases, lack of appropriate breed and breeding strategies and
poor understanding of the production system as a whole. Nigerias economic recovery programs have necessitated a radical
shift from total dependence on government for job to self-employment. One such attractive area for self employment is
goat rearing, which is the raising of goat for personal use of profit with the aim of better use of the land and forages,
sources of food, income and employment to humans. Goat meat is socially well accepted in many parts of Nigeria.
It is commonly known as chevron and is also one of aspect of livestock production in Nigeria (Dombo et al, 1999). Goat
rearing and trading is prevalent in almost every part of Nigeria. This is so because they are cheaper to rear than other
ruminants (cattle and sheep) since they require less space and shelter, and smaller quantities of food and equipments.
The small size of the carcass (10 to 15 kg) makes it easy to handle, and the meat of a carcass can be consumed in a day by
a few families in village, without the necessity for cold storage or other forms of preservation. This fits in very well with
conditions in the rural communities. Furthermore, goats are of value in removing browse and shrubs which infest farm
lands in grassland areas (Mamabolo and Webb, 2005).
Raising and marketing goats can be valuable part of a sustainable farm. Integrating livestock into a farm system
can increase its economic and environmental health and diversity, thereby making important contributions to the farms
sustainability. Every year, an increasing number of Nigerians earn their living as goats producers, transporters, traders and
middlemen. Goat rearing and trading, according to Ayele et al, (2003) and Juvenal (2009), is constrained by management
related issues (for example inadequate husbandry), poor nutrition, prevalence of diseases, inadequate and ready supply of
the most appropriate type of breeding stock and how they can be improved, lack or poor supply of inputs
(including drugs, feeds, water and others which are specific to each area), unavailability of appropriate market and poor
market organization, poor infrastructures and lack of efficient information networks, poor public policy on the environment
especially on the administration of animal health policies and controlling diseases, decreasing size of farm lands to allow
for alternative options that can be exploited economically, insecurity and livestock rustling among pastoral communities,
frequent drought and lack of preparedness for such calamities. Other common constraints include lower performances due
to high abortion rate and mortality rate of young, uncontrolled breeding leading to low conception rates, low birth weight,
limited information on local breeds and genetic characteristics of existing goat population. There are a number of
production factors that have been identified as constraints to increased production and growth in the marketing industry.
These include seasonality of breeding leading to an inconsistent year round supply of goat, weaning percentage, predation
and parasites.
Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

Structure and Performance of Goat Market in Oyo State, Nigeria

Marketing is an important aspect of any livestock system. Marketing include all the activities required to support
the movement of goats and goat products from the site of production to the end user (Endeshaw, 2007). It provides the
mechanism whereby producers exchange their livestock and livestock products for cash (FAO, 2002). Livestock marketing
studies are essential to provide vital information on the operations and efficiency on livestock marketing system for
effective research, planning and policy formulation in the livestock sector. Farmers need to be aware of the preferred
characteristics of animals as well as price patterns so that they can plan breeding and fattening programmes and breed
selection consistently with the best seasonal prices and consumers preferences (Ehui et al, 2000). According to Kotler
(2008), market structure refers to those organisational characteristics of a market that exercise strategic control on the
nature of competition and behaviour within the markets. Market structure is important because the structure determine the
quality of the industrys performance. Marketing performance is the composite end result or the assessment of how well
process of marketing is carried out and how successful its aims are accomplished. In other words, it is the economic result
that flows from operation of an industry as an aggregate of firms. Marketing performance is concerned with technological
progressiveness, growth orientation of agricultural firms efficiency of resources use, product improvement and maximum
market service at the least possible cost. A marketing channel describes the movement of a product or commodity from the
site of production to the place of final consumption. It may include transportation, handling and storage, ownership
transfers, processing, wholesale distribution, retailing and so on.
In attempting to design improvement measures, marketing systems and performance evaluation is indispensable.
Therefore, there is the need to seek answers to questions relating to the socio-economic characteristics of goat traders, the
marketing practices and experience of goat traders, the costs and returns to goat enterprise in the study area, as well as
structural and performance disposition. To this end, the specific objectives are to describe the socio-economic
characteristics of goat traders in the study area, investigate marketing practices and experience of respondents, examine the
profitability of goat enterprise, compute the concentration ratio of goat market, as well as identify challenges militating
against efficient goat trading in the study area. Based on the research questions and objectives, hypothesis of the study is:
There is no significant relationship between goat transaction cost and revenue generated by respondents.

METHODOLOGY
This study was carried out in Ogbomoso area of Oyo state, Nigeria. Ogbomoso is a town in the south western part
of Nigeria. Ogbomoso is bounded by Ilorin at the north, Oyo at the south, Ejigbo at the west and Igbeti at the east.
There are five local government areas situated in Ogbomoso, they are: Ogbomoso north, Ogbomoso south, Ogo-Oluwa,
Oriire and Surulere local government areas. Ogbomoso is an ancient town which is the second populated town in Oyo state
after Ibadan. The economic situation of the town is progressing on daily basis. Ogbomoso is geographically located at
co-ordinate 80 8I north on the latitude line and longitude 4o 16I east. According to Wikipedia (2011), the altitude of
Ogbomoso ranges from as low as 800mm to 6000mm above sea level. The minimum annual temperature ranges between
260C and 360C. The daily maximum temperature become very high during the month of May to July, during which the
temperature can reach as high as 39oC. The mean annual temperature is about 27oC. Mean annual rainfall ranges from
about 800mm at the onset of heavy rains to 1500mm at its peak. It receives bimodal rainfall. The natural vegetation is
predominantly vegetation of derived savanna. The soil type in the study area is granular rather than cohesive and
conductive to the cultivation of crops. According to Wikipedia (2011), the estimated population of Ogbomoso as at March
2005 is around 1,200,000. The majority of the people are members of Yoruba ethnic group. Production of cattle

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Oladejo Joana Adefemi

(as milk and meat), goat and sheep (income and meat) and poultry are commonly practiced. The agricultural production
system in the study area is mixed cropping. Crop production is the main agricultural activity for the livelihood of the
smaller holder in the study area. Yam, cassava, maize and tobacco are some of the notable agricultural production products
of the region. Ogbomoso was chosen for this study because livestock enterprise is an integral part of the land use system.
Population of this study comprises the goat traders in the study area. The list of registered goat traders was
collected from goat traders association secretariat of each of the five local government areas. Random sampling technique
was employed to select 20 % of goat traders from the list supplied by each local government area, making a total number
of 125 respondents for this study. Primary data were collected with the use of a structured interview schedule.
The data collected for this study were analyzed using:

Descriptive Statistics
This involves the use of mean, standard deviation, tabular presentation, frequencies and percentages.

Budgetary Analysis
This was used to determine the profitability of goat trading enterprise. It involves computation of cost and returns

to the enterprise.
Cost is an outlay incurred in producing a particular product at a particular time period. The components include

Fixed Costs (FC): Are costs which do not change with output.

Variable Costs (VC): These are costs that vary with the level of output used.

Total Costs (TC): It is the summation of fixed cost (FC) and variable costs (VC).

Total Revenue (TR): Is the total output multiplied by the price per unit of produce.
Total Revenue (TR) = Price (P) * Output (Q) i.e. TR = PQ

Gross margin = Total revenue Total variable cost

Profit = Gross margin Total fixed cost (i.e. Total revenue Total cost)

Benefit Cost ratio (BCR) = Revenue Cost. When BCR is greater than 1, the enterprise is profitable. If less
than 1, the enterprise is not profitable.

Concentration Ratio
This was employed to investigate the structure of goat market. Concentration is one variable of market structure
which affects the behavior of the firm(s) participating in that market. Concentration ratio is a function used to take account
of both the number and size distribution of firms in the market. This measures the extent to which the larger sellers control
the bulk of the industrys sales.

Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

Structure and Performance of Goat Market in Oyo State, Nigeria

Concentration Ratio (CR) Computation

Where n = Sales of each firm

N = Total sales of the firms in the industry
Regression Analysis
This was employed to test for hypothesis of the study. The linear functional equation was specified as:
Y = 0 + X1 - X2 + X3 - X4 - X5 - X6 - X7 + X8 + X9 +
Where Y = Total Revenue (#)
X1 = Purchase cost (#)
X2 = Transportation cost (#)
X3 = Labour cost (#)
X4 = Feeding cost (#)
X5 = Veterinary cost (#)
X6 = Depreciated fixed cost (#)
X7 = Goat trading experience (Years)
X8 = Years spent in school (Years)
X9 = Age (Years)
1 .9 = Coefficients of independent variables 1..9
0 = Constant
= error term

RESULTS AND DISCUSSIONS

Socioeconomic Characteristics Distribution of Respondents
The socio-economic characteristics of the respondents considered include age, sex, marital status, educational
status, number of years spent in school, religion, primary occupation, years of experience and household size.
Table 1 below shows the age distribution of the people engaged in goat trading in the study area. It was revealed that
12.8% of the respondents claimed to be 30 years old or less, 31.2% fall between 31-40 years, 34.4% fall between 41-50
years, 12.8% fall between 51-60 years while 8.8% of the respondents claimed to be above 60 years old. The mean age was
42.9 years with standard deviation of 11.076. This implies that most of the goat traders are still in their economic active
age. It can be seen from the table that both male and female goat traders were found in the study area. Majority (80.8%) of
the respondents were married, 6.4% were single, 1.6% divorced, 4.8% were separated while 6.4% claimed to be widow.
This indicates that the larger percentages of goat traders are married. As a result, family labour is likely to be available for

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Oladejo Joana Adefemi

goat marketing activities. Result of analysis revealed that 48.8% of goat traders received secondary education, 26.4% had
tertiary education, 12. 8% attended primary school while 12.0% received no formal education. This revealed that a large
percentage of the respondents are literate and this could enhance their management skill. Table 1 shows that 54.4% of the
respondents practice Islamic religion while 45.6% are Christians. Majority of respondents are Muslims. More Muslims are
in to goat business. Result also shows that 53.6% of the respondents claimed goat business is their primary occupation,
28.8% claimed farming as their main occupation while 17.6% claimed other occupations like teaching, schooling,
hairdressing, motor mechanic as primary.
Table 1: Socioeconomic Characteristic Distribution of Respondents, n = 125
Variable

Frequency
Age
30
16
31-40
39
41-50
43
51-60
16
>60
11
Sex
Male
66
Female
59
Marital Status
Single
8
Married
101
Divorced
2
Separated
6
Widowed
8
Educational Status
No formal education
15
Primary school
16
Secondary school
61
Tertiary
33
Religion
Christianity
57
Islam
68
Primary Occupation
Goat trading
67
Farming
36
Others
22
Source: Field survey, 2014.

Percentage
16.8
31.2
34.4
12.8
8.8
52.8
47.2
6.4
80.8
1.6
4.8
6.4
12.0
12.8
48.8
26.4
45.6
54.4
53.6
28.8
17.6

Goat Marketing Practices and Experiences of Respondents

Table 2 revealed that 36% of the goat traders have been in the business since less or equal to 10 years, 36%
claimed11-20 years, 8% claimed 31-40 years, 4% claimed 41-50 years while 0.8% claimed greater than 50 years.
The mean year of the marketing experience is 18.31 years. Table 2 also shows land ownership distribution of respondents.
From the result, 97.6% claimed to own the piece of land on which goats are kept while 2.4% of them operate on land
owned by group of individuals. This implies majority of the respondents are land owners which help in easy
entrepreneurship. As revealed in the table, 30% of respondents stock their goat sheds with goats purchased from
neighbourhood and nearest local farmers to be re-sold immediately or later, 47.2% claimed to depend on other wholesalers
for their stock of goats while 22.8% claim to purchase goats from the northern part of the country. Respondents in the latter
category are obviously the large scale goat traders. Analysis revealed the species of goat traded by respondents in the study
Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

Structure and Performance of Goat Market in Oyo State, Nigeria

area. The table showed that 83.2% of the respondents trade in only one type of goat specie while 16.8% of them trade in
two or more goat species. The species commonly traded in the study area include African Dwarf and Red Sokoto.
Most of the respondents (87.2%) finance the enterprise with their personal money, 11.2% of them finance it with money
from relatives or friends while other obtained loans for financing the enterprise. According to respondents, loans are
obtained from cooperative societies and goat traders associations to which they belong. Analysis shows quantity of goat
sold by the respondents on monthly basis. The table revealed that 35.2% of the respondents sold less than ten, 51.2% sold
between 10 -20 goats per month while 13.6% claimed to sell above 20 goats every month. On the average, each respondent
sold 13.64 goats per month in the study area.
Table 2: Goat Marketing Practices and Experiences of Respondents, n = 125
Variable

Frequency
Years of Experience
< 10
45
11-20
45
21-30
19
31-40
10
41-50
05
>50
01
Land Ownership
Personal
122
Group of individuals 2.4
03
Source of Goat
Neighbourhood / nearest local farmers
37
Large scale goat traders (wholesalers)
59
Northern part of Nigeria
29
Species of Goat
One
104
Two or more
21
Major Source of Finance
Personal savings
109
Loans
02
Relatives/Friends
14
Quantity of Goat Sold
Per Month (Actual Number)
< 10
44
10-20
64
>20
17
Source: Field survey, 2014

Percentage
36
36
15.2
08
04
0.8
97.6
2.4
30.0
47.2
22.8
83.2
16.8
87.2
1.6
11.2

35.2
51.2
13.6

Cost and Returns Analysis per Month

The budgetary analysis revealed that on the average, the variable cost recorded by respondents per month was
309,621.48 only. The variable cost components are: cost of transportation, cost of labor, cost of feeding, cost of
veterinary services / drugs and cost of purchasing goats. The cost of fixed assets was arrived at using straight line method
of depreciation. The depreciated fixed cost per month was 3,941.11only. The fixed cost components are rent on land,
shed construction, fence construction, cost of feeding / drinking containers and ropes. Analysis showed that averagely on
monthly basis, revenue was 367,794.48 (Quantity (number) sold x price per goat). Total cost therefore equals
313,562.59 per month. The budgetary analysis gave a gross margin of 58,173.00 only and the economic profit of
54,231.90 per month. This implies a gross margin of 4,264.88 per goat sold (gross margin per month number of goats

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Oladejo Joana Adefemi

sold per month) and economic profit of 3,975.95 per goat sold (economic profit per month number of goats sold per
month). The benefit cost ratio ( Revenue Cost) was 1.17 which is an indication that the enterprise is profitable in the
study area.
Structure of Goat Market
Concentration is one variable of market structure which affects the behavior of the firm(s) participating in that
market. This measures the extent to which the larger sellers control the bulk of the industrys sales.
Concentration Ratio (CR) Computation

Where n = Sales of each firm

N = Total sales of the firms in the industry
From the analysis result, the value for the concentration ratio is 0.22267 which is very low. The implication of this
value is that no firm is dominating the market and goat market tends towards perfect competition. This type of market
structure is characterized with (1) The product sold is homogenous, (2) There is no barrier to entry and exit of firms, and
(3) There are many buyers and sellers in the study area.
Regression Analysis
This analysis was carried out to establish the relationship between total revenue and cost of goat enterprise.
The regression model results for goat enterprise are represented in Table 3.
Table 3: Result of Regression Analysis: Dependent Variable (Y) is the Total Revenue
Variable
Constant
Purchase cost()
Transport cost()
Labour cost ()
Feeding cost ()
Veterinary cost ()
Dep. Fixed cost ()
Goat trading experience (years)
Year spent in school
Age
R
0.998
0.996
R2
Adjusted R2
0.995
F
2920.703***
Source: Data Analysis, 2014

Significant at 1% level

Significant at 10% level

Coefficient
90413.577
1.158
-0.355
0.176
-6.840
-4.961
-6.612
1192.415
1018.886
460.089

t-Ratio
3.064
151.346***
-0.160
0.035
-1.842*
-0.332
-0.787
1.810*
0.885
0.701

Three (3) of the estimated variables were found to have statistically significant relationship with revenue
generated by respondents. Purchase cost is significant at 1% level and has a direct relationship with revenue generated

Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

Structure and Performance of Goat Market in Oyo State, Nigeria

which indicated that increase in purchase cost leads to significant increase in the revenue generated by goat traders in the
study area. This could be explained that when respondents invest more to purchase good looking and healthy goats,
it brings more revenue at the long run. Feeding cost is significant at 10% level. The negative relationship implies that
increase in feeding cost of the goats leads to significant decrease in the revenue generated by the respondents.
Years of experience is statistically significant at 10% level and has a positive relationship with revenue. This implies that
increase in years of goat trading experience results in increased revenue generated.
An adjusted R square value of 0.995 from the regression result revealed that 99.5 percent of explained variation in
revenue generated is due to the joint effect of all the independent variables specified in the model while the remaining
0.5 percent unexplained variation in revenue may be due to other variables of interest not specified in the model but are
present in the error term. The null hypothesis is therefore rejected and this means there is significant relationship between
transaction cost of goat and revenue generated by the respondents.
Challenges to Goat Market
There are numerous challenges faced by goat traders in the study area. According to data obtained and analyzed
these include: finance (99.2%), fluctuation in price (45.6%), seasonality of market (0.8%), thief or pilfering (3.2%),
expensive veterinary services and drugs (8.8%). The result revealed that finance is the major factor militating against goat
trading activities in the study area.

CONCLUSIONS AND RECOMMENDATIONS

This study concluded that goat trading enterprise is profitable in the study area. Result of regression analysis
showed that three of the estimated variables (purchase cost, feeding cost and respondents years of experience) have
significant effect on revenue generated by respondents in the study area. Goat market in the study area tends toward perfect
competition. The challenges faced by the goat traders are in order of finance, fluctuation in price, seasonality of market,
mortality, thief or pilfering, expensive veterinary service and drugs.
This study recommends that goat traders should form a registered trade association through which solution could
be sought to the challenge of unstable market price. Such trade association could also provide subsidized veterinary
services and drug to its members as well as formally seek the governments attention on the issue of credit facilities
provision for its members.

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Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0